Retirement; like your parents, but way cooler
In 1991 Billy and Akaisha Kaderli retired at the age
of 38. Now, into their 4th decade of this
financially independent lifestyle, they invite you
to take advantage of their wisdom and experience.
Your Portfolio for Retirement?
Billy and Akaisha Kaderli
Billy and Akaisha at Caleta Beach,
We’ve written about this for years in
When preparing for
retirement, designing your portfolio for income is over-rated. Oh, it feels good bragging about how much
money you make each year, but then you also quiver about the taxes you owe
What’s the point?
To make it - then give it back - makes no sense.
Today, with interest rates at an all time low, people are being forced to look
Our approach 3 decades ago
When we retired 30 years ago, having annual income was not on our minds.
Knowing we had decades of life-sans-job ahead of us, we wanted to grow
our nest egg to outpace
inflation and our spending habits as they changed too. Therefore, we
invested fully in the S&P 500 Index.
On the day we left the working world the S&P 500 closed at 312.49.
We will get back to this in a minute.
500 solid, well-managed companies
S&P Index are 500 of the best-managed companies in the United States.
financial plan was based on the idea that these solid companies
would survive calamities of all sorts and their
values would be expressed in higher future stock prices outpacing inflation.
After all, these companies are not going to sell their products at losses.
Instead they would raise their prices as needed to cover the expenses of
both rising resources
and wages, thereby producing profits for their shareholders.
How long has Coca-Cola been around? Well over 100 years and the company went public in
1919 when a bottle of Coke cost five cents.
Inflation cannot take credit for all of their stock price growth as they
created markets globally and expanded their product line.
This is just one example of the creativity involved in building the American Dream. The people
running Coke had a vision and have executed it through the years. Yes, “New
Coke” was a flop as well as others, but the point is that they didn’t stop
trying to grow because of a setback.
Coca-Cola is just one illustration of thousands of companies adapting to current
trends and expanding with a forward vision.
Look at Elon Musk. He has dreams larger than most of us can imagine.
What I want to state here is that when we retired in 1991, the S&P 500 closed at
312.49. Today it is north of 3900 - a 10% annual return.
Sell as needed
Another benefit we have in designing our portfolio in this manner, is that when we sell shares for “income,” they are taxed at a
more favorable rate as a long-term capital gain. Dividend output is low, our tax liability is minimal, yet our net worth has
grown, out-pacing spending and inflation.
We are in control of our
Our suggestion is not to base your retirement income on income-producing
investments but rather to go for growth. You can always sell a few shares to
cover your living expenses.
About the Authors
Early Lifestyle appeals to a different
kind of person – the person who prizes their
independence, values their time, and who doesn’t
want to mindlessly follow the crowd.
Retire Early Lifestyle Blog
About Billy & Akaisha